Irani v. Exxon Mobil Corp. CA2/7 ( 2021 )

Filed 7/7/21 Irani v. Exxon Mobil Corp. CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
SHERRY IRANI et al., B308353
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. 19STCV00694)
v.
EXXON MOBIL CORPORATION
et al.,
Defendants and
Respondents.
APPEAL from the judgment of the Superior Court of
Los Angeles County, Maurice Leiter and David S. Cunningham
III, Judges. Affirmed.
Weitz & Luxenberg, Benno Ashrafi and Josiah Parker;
Sharon J. Arkin, The Arkin Law Firm for Plaintiffs and
Appellants.
Dentons US, Jayme C. Long, Justin R. Sarno, Alexander B.
Giraldo; Gibson, Dunn & Crutcher, Theodore J. Boutrous, Jr.,
Joshua S. Lipshutz and Joseph R. Rose for Defendants and
Respondents Exxon Mobil Corporation and ExxonMobil Oil
Corporation.
King & Spalding, Peter A. Strotz and Anne M. Voigts for
Defendants and Respondents Chevron Corporation, Chevron
U.S.A. Inc., and Texaco Inc.
__________________________
Sherry Irani, Robert Bahram Irani, and Azar Behzadi
(collectively, Irani plaintiffs) appeal from a judgment entered
after the trial court granted the motions for summary judgment
filed by defendants Chevron Corporation, Chevron U.S.A. Inc.,
and Texaco Inc. (Chevron defendants), and Exxon Mobil
Corporation and ExxonMobil Oil Corporation (Exxon defendants).
The Irani plaintiffs brought wrongful death and survivor claims
(including causes of action for negligence, premises liability, and
loss of consortium), alleging their deceased father Ali Irani1
contracted mesothelioma caused by exposure to asbestos while he
was an Iranian citizen working for the National Iranian Oil
Company (NIOC) from the late 1950s to the late 1970s in
facilities controlled by defendants.2 The trial court concluded the
Chevron and Exxon defendants did not owe a duty of care to
Irani.
On appeal, the Irani plaintiffs contend the Chevron and
Exxon defendants owed Irani a duty of care based on their
1 To avoid confusion, we refer to Ali Irani as Irani and
Sherry Irani by her first name.
2 It is undisputed that mesothelioma is a cancer associated
with exposure to asbestos.
2
predecessors’ control over the Abadan refinery in which Irani
worked and a 1954 contractual agreement between the Iranian
government and a consortium of international oil companies,
including defendants’ predecessors (the Agreement). The Irani
plaintiffs also assert the Chevron and Exxon defendants, through
their predecessors, owed a duty to protect refinery workers like
Irani from asbestos exposure based on a special relationship
between the predecessor companies and the refinery workers
arising from the Agreement. Alternatively, Irani contends the
Chevron and Exxon defendants owed refinery workers a duty of
care, arising from a special relationship between defendants’
predecessors and the companies that operated the refinery.
During the pendency of this appeal, we decided Sabetian v.
Exxon Mobil Corporation (2020) 57 Cal.App.5th 1054, 1075-1076
(Sabetian), in which we held defendants’ predecessors3 did not
owe a duty of care to protect refinery workers from asbestos
hazards at the Abadan refinery. We concluded neither the
Agreement nor the plaintiffs’ evidence was sufficient to create a
triable issue of fact that defendants’ predecessors exercised direct
control over day-to-day refinery operations. (Id. at pp. 1072-
1075.) The Chevron and Exxon defendants likewise did not owe a
duty of care to Irani, and we affirm.
3 Sabetian involved the same defendants who are parties to
this action; the plaintiffs were a former Iranian refinery worker
at the Abadan refinery, who later contracted mesothelioma, and
his wife. (Sabetian, supra, 57 Cal.App.5th at p. 1060.)
3
FACTUAL AND PROCEDURAL BACKGROUND
A. The Agreement4
In 1951 the government of Iran nationalized its oil assets,
assuming control from the Anglo-Iranian Oil Company, which
was majority-owned by the government of Great Britain. In 1952
Iran formed NIOC to own and supervise all of Iran’s oil assets.
To afford access to global oil markets and avoid possible influence
from the former Union of Soviet Socialist Republics, the United
States “devised a plan for a consortium of Western corporations
to support the Iranian Government in running its oil industry to
increase access to global markets and revenues.”5
In 1954 American oil companies Gulf Oil Corporation,
Socony-Vacuum Oil Company, Inc., Standard Oil Company of
New Jersey, Standard Oil Company of California, and the Texas
Company, and European oil companies Anglo-Iranian Oil
Company, Ltd., N.V. de Bataafsche Petroleum Maatschappij, and
Compagnie Francaise des Pétroles (collectively, the consortium
members) entered into the Agreement with Iran and NIOC.
Defendants Chevron Corporation and Chevron U.S.A. Inc., are
successors in interest to Standard Oil Company of California and
Gulf Oil Corporation. Defendant Texaco Inc., is the successor of
the Texas Company. The Exxon defendants are successors in
4 This discussion is based on undisputed facts taken from
evidence submitted in connection with the summary judgment
motions.
5 It is undisputed the Agreement principally covered the
Abadan refinery. Consistent with the practice of the parties, we
use “Abadan refinery” to refer generally to the facilities covered
by the Agreement.
4
interest to Socony-Vacuum Oil Company, Inc., and Standard Oil
Company of New Jersey.
The Agreement consists of two parts, the first among the
consortium members, Iran, and NIOC and the second among
Iran, NIOC, and the Anglo-Iranian Oil Company, Ltd. Only part
I is at issue in this case. The recitals for part I provided,
“WHEREAS, both the Government of Iran and [NIOC] desire to
increase the production and sale of Iranian oil, and thereby to
increase the benefits flowing to the Iranian nation . . . , but
additional capital, experienced management, and technical skills
are required in order to produce, refine, transport and market . . .
oil in quantities sufficient to effect this increase in a substantial
amount . . . [¶] WHEREAS, the international oil [consortium
members] are in a position and are willing to supply such capital,
management and skills; and [¶] . . . are in a position to market
substantial quantities of Iranian oil . . . throughout a large part
of the world over a considerable period of time, to the mutual
benefit of the Iranian nation and themselves . . . [¶] . . . the
Parties are agreed that said companies should undertake the
operation and management of certain of the oil properties . . . of
the Government of Iran and [NIOC], including the Abadan
refinery, as hereinafter set forth . . . [¶] [¶] . . . negotiations
have been amicably carried out with the object of assuring to the
Government of Iran and [NIOC], on the one hand, a substantial
export market for Iranian oil and a means of increasing the
material benefits to and prosperity of the Iranian people, and to
the companies, on the other hand, the degree of security and the
prospect of reasonable rewards necessary to justify the
commitment of their resources and facilities to the reactivation of
the Iranian oil industry.”
5
Article 3, section A of the Agreement provided that to carry
out the “functions of exploration, producing, refining,
transportation and the other functions specified in” the
Agreement, the consortium members incorporated the “Operating
Companies” under the laws of the Netherlands. The Agreement
defined the Operating Companies as the Iranian Oil Exploration
and Producing Company (IOEPC) and Iranian Oil Refining
Company (IORC). The consortium members incorporated a
holding company, Iranian Oil Participants Ltd. (IOP), which
wholly owned IOEPC and IORC. Each consortium member
formed at least one wholly owned subsidiary, each of which
purchased 7 to 8 percent of IOP’s shares. In article 3, section A of
the Agreement, the consortium members “jointly and severally
guarantee[d] the due performance by the Operating Companies of
their respective obligations under this Agreement.”
Article 4 of the Agreement listed and “strictly limited” the
“rights, powers and obligations of the Operating Companies as
well as the nature and extent of the supervision to be exercised
by Iran and NIOC . . . to what is clearly stated in this Article.”
(Art. 4, § J.) Section A, paragraph (1) provided IOEPC the right
to explore, drill for, produce, extract, process, store, transport,
and ship crude oil and natural gas. Section A, paragraph (2)
provided for IORC to have the right to refine and process crude
oil and natural gas produced by IOEPC.
Article 4, section F sets forth “[t]he obligations of the
Operating Companies to Iran and NIOC.” These obligations
included the duty “to conform with good oil industry practice and
sound engineering principles applicable and appropriate to
operations under similar conditions in conserving the deposits of
hydrocarbons, in operating the oilfields and refinery and in
6
conducting development operations.” (Agreement, art. 4, § F,
¶ (1).) The Operating Companies were obligated “to carry on
such exploration operations as are economically justifiable with a
view to providing sufficient reserves to support the rate of
production of oil” (id., § F, ¶ (2)); “to maintain full records” and
“accounts” of their activities (id., § F, ¶ (3)); “to minimize the
employment of foreign personnel” (id., § F, ¶ (4)); and “to prepare
in consultation with NIOC plans and programs for industrial and
technical training and education and to cooperate in their
execution . . . to replace foreign personnel as soon as reasonably
practicable” (id., § F, ¶ (5)). Article 4, section I further provided,
“[T]he Operating Companies shall determine and have full and
effective management and control of all their operations,” subject
to supervision of their operations by Iran and NIOC as set forth
in sections F and G.
Article 5, section A of the Agreement stated, “Iran and
NIOC undertake that neither of them, and no person other than
the Operating Companies, shall at any time . . . carry out . . . any
of the functions specified in [p]aragaphs (1) and (2) of Section A of
Article 4 of this Agreement” (defining the rights of IOEPC and
IORC to exploration, production, and refining). Article 7 of the
Agreement granted the Operating Companies the right to
“exclusive use” of certain lands owned by NIOC and Iran for
“their operations under [the] Agreement.”6 Under Article 17 of
the Agreement, NIOC retained authority over all “non-basic
6 It is undisputed NIOC owned and operated the Abadan
refinery prior to execution of the Agreement, and the Agreement’s
grant of authority to the Operating Companies constituted a
transfer of control over the functions in article 4 from NIOC to
the Operating Companies.
7
operations,” including medical and health services, industrial and
technical training and education, and housing.
Article 18 provided consortium members “shall” purchase
crude oil and “may” purchase natural gas from NIOC for resale in
Iran for export. Consortium members were permitted to assign
their rights and obligations to purchase crude oil and natural gas
to their subsidiaries, referred to as “Trading Companies.” Under
article 20 of the Agreement, the consortium members guaranteed
certain oil production and export quantities on an annual basis.
The Agreement contemplated a 25-year lifespan, but in
1973 Iran assumed operations from IORC and IOEPC. IORC’s
employees were transferred to a new entity formed by NIOC, Oil
Services Company of Iran, which assumed operation of the
Abadan refinery.
B. The Complaint
The Irani plaintiffs filed this action on January 10, 2019
against the Chevron and Exxon defendants and others, alleging
causes of action for negligence, strict liability, premises liability,
negligent joint venture, alter ego, and loss of consortium. The
complaint alleged each cause of action as a survivorship claim by
Sherry as the successor in interest to Irani, and as wrongful
death claims by the Irani plaintiffs as heirs to Irani. The
complaint alleged the Chevron and Exxon defendants are the
successors in interest to consortium members that were
signatories to the Agreement. The complaint alleged the
predecessors to the Chevron and Exxon defendants, as
consortium members, contributed “capital, management and
skills in the operation and management of the oil properties of
[NIOC], specifically the . . . oil refinery in Abadan, Iran.”
8
Further, the predecessor companies had “full and effective control
of the [Abadan] refinery . . . in order to operate that refinery in
conformity with good oil industry practice and sound engineering
principles applicable to that industry.”
The complaint alleged further Irani was exposed to
products containing asbestos while he worked at the Abadan
refinery and other Iranian facilities from approximately the
1950s to the late 1970s. In January 2018 Irani was diagnosed
with mesothelioma caused by his exposure to asbestos at these
facilities. Irani died the same month.
C. The Chevron and Exxon Defendants’ Motions for Summary
Judgment
The Chevron and Exxon defendants separately moved for
summary judgment. They argued they owed no duty of care to
Irani because they did not own, possess, or control the facilities in
which Irani was alleged to have been exposed to asbestos.
The Chevron defendants filed a declaration of Frank G.
Soler, the senior subsidiary governance liaison for Chevron
Corporation, who stated the Chevron defendants’ predecessors
“did not ever own, lease, maintain, manage, control, or supervise”
the Abadan refinery. Soler averred a separate corporate entity
facilitated requests from the Operating Companies to the
consortium members “for skilled personnel.” Employees of the
consortium members sent to work at the Abadan refinery were
“seconded,” meaning “their employment with the [consortium
member] oil company terminated and such employees were then
formally employed by IORC and/or IOEPC.”
The Chevron defendants also filed a declaration of former
Texaco Inc., employee Carter B. Conlin in which Conlin averred
9
he worked at the Abadan refinery from 1958 to 1963. At the
refinery, Conlin supervised approximately 20 engineers,
including “seconded employees” from other oil companies.7
Conlin and the other seconded employees he supervised were
“employed and paid by IORC for all work performed at the
Abadan [r]efinery” and did not take direction or payment from
“their past oil company employers or any oil company
subsidiaries.” The Chevron defendants filed excerpts of
deposition testimony from Conlin in Alkhas v. A.W. Chesterton
Company (Super. Ct. L.A. County, 2014, No. BC473745), in which
he testified employees loaned by consortium members to IORC
were thereafter treated as employees of IORC.8
D. The Irani Plaintiffs’ Opposition to Defendants’ Motions for
Summary Judgment
The Irani plaintiffs opposed the Chevron and Exxon
defendants’ motions, arguing the Agreement and defendants’
control over operations at the Abadan refinery created a duty of
care owed by the Chevron and Exxon defendants to Irani to
7 From 1958 to 1960, Conlin held the position of section head
of the oil conversion processes section of the process engineering
department for IORC at the Abadan refinery. From 1960 to
1963, he held the position of technical advisor for catalytic
reforming in the refining operations department for IORC at the
Abadan refinery.
8 The Exxon defendants also relied on the Soler declaration
and the Conlin deposition transcript filed by the Chevron
defendants.
10
protect him from asbestos exposure.9 The Irani plaintiffs filed
multiple declarations and excerpts of deposition testimony with
their opposition.
Dr. Neill Weaver stated in his deposition in Altimore v.
Quigley Company, Inc. (District Ct. Galveston County, Texas,
2013, No. 03CV0588) he worked from 1951 to 1973 as a physician
for Esso Standard Oil Company, an Exxon predecessor.10
Dr. Weaver identified a 1937 document entitled “Dust Producing
Operations in the Production of Petroleum Products and
Associated Activities,” which made suggestions for control and
suppression of asbestos dust. When asked about Esso’s asbestos
practices, Dr. Weaver testified that when he began working in
Esso’s Baton Rouge, Louisiana refinery in 1951, “measures were
in effect for the control of exposures throughout the refinery and
the medical surveillance program for the workers potentially
exposed to asbestos was in operation and had been in operation
for decades.”
Bruce Larson, who testified as Exxon Mobil Corporation’s
person most qualified in Shahabi v. A.W. Chesterton Company
(Super. Ct. L.A. County, 2012, No. BC421531), was asked, “Do
you agree that Exxon and Mobil had employees in high level
9 The Irani plaintiffs dismissed their strict liability,
negligent joint venture, and alter ego claims before the summary
judgment proceedings. The Irani plaintiffs did not dispute IOP,
IORC, and IOEPC each held regular meetings, maintained
independent records, and had their own officers and directors.
10 Weaver testified he worked for Esso Standard Oil Co.,
which later became Exxon. The Exxon defendants acknowledge
previously doing business under the name Esso. It is not clear
from the record which consortium member Esso succeeded.
11
management at the Abadan refinery between 1955 and 1968?”
He responded, “I think that’s probably correct, yes.” Larson also
testified it was “certainly possible” that a person with
management responsibility could cause work practices to be
followed at the refinery, but he clarified that the Abadan refinery
“had a patchwork of various jobs represented by Iranian
nationals, various jobs represented by people from the
participating companies, and . . . I don’t really know how control
was exercised in a situation like that.” Larson testified he
believed Exxon employees who worked at the Abadan refinery
would be paid by the “holding company,” not Exxon, and he was
not aware of Exxon or Mobil “exercis[ing] any direct control over
anybody” working at the Abadan refinery.
Testifying as Exxon Mobil Corporation’s person most
qualified in Enayati v. A.W. Chesterton Company (Super. Ct. L.A.
County, 2009, No. BC400729), Larson testified he had no direct
knowledge of the health and safety practices of the Abadan
refinery during the period from 1954 to the 1980s. But he stated
it had “always been at least the policy of Exxon and Mobil
that . . . the same rules and regulations that apply domestically
apply to overseas facilities. So I’m assuming that—and this is an
assumption . . . [¶] . . . that comparable safety procedures and
programs would be in place at [the Abadan] refinery as they
would have been elsewhere.” Larson affirmed he based his
assumption on his experience with the standard operating
procedures of the company.
Daniel Agopsowicz testified as the person most qualified for
the Exxon defendants in his deposition in Sabetian v. Air &
Liquid Systems Corporation (Super. Ct. L.A. County, 2018,
No. BC699945). When asked whether the Exxon defendants
12
agreed “[i]t is part of good oil industry practice to ensure that the
people on the refinery floor are kept safe,” Agopsowicz replied,
“Yes.” When asked whether the Exxon defendants’ predecessors
“believe[d] at the time of signing [the Agreement] that [they] had
an obligation to ensure that the Abadan [r]efinery was operated
appropriately,” Agopsowicz replied, “If they signed [the
Agreement], then they would agree with this, yes.”11 Agopsowicz
further testified the Exxon defendants’ predecessors sent
employees to work for the operating companies at the Abadan
refinery, including Standard Oil of New Jersey’s employee Paul
Kuhl, who became general manager of the refinery.
Soler testified as the person most qualified for the Chevron
defendants in Sabetian v. Air & Liquid Systems Corporation,
supra, No. BC699945). Soler was asked in his deposition whether
the statement made by Standard Oil of California (the
predecessor of Chevron U.S.A., Inc.) in its 1964 annual report
was true that “[t]he Iranian oil consortium has operated Iran’s
principal oil[] producing, refining, and transportation facilities for
the past ten years.” Soler responded, “It’s a statement that was
made by the company to stockholders.”
The Irani plaintiffs also submitted a copy of a booklet
entitled “Working with the Operating Companies in Iran 1958”
(Iran booklet) issued by Socony Mobil Oil Company, Inc. (an
affiliate of consortium member Socony-Vacuum Oil Company,
Inc., the predecessor in interest to the Exxon defendants) to
Socony’s employee Charles Schroeder. Schroeder was transferred
11 It appears from the question and answer that this
testimony was in the context of questions about the Agreement.
However, the record does not contain the prior page of the
deposition transcript.
13
to Iran to work for the operating companies from 1958 to 1960.
The booklet explained IORC and IOEPC had conducted
“production and refining of oil in Southern Iran in accordance
with the Agreement . . . . [¶] The joint Head Office of these two
Operating Companies is located in Teheran, from which all
activities of the Companies are directed.” A section entitled
“Terms and Conditions of Employment” stated, “Employees on
loan assignment from a Member Company will remain employed
by such Member Company but will be subject to these conditions
for the period of their Company Service, unless otherwise
provided in these conditions.” The booklet further stated the
operating companies would pay the salaries of “loan employees,”
with monthly deductions from the total salary paid for “Iranian
income tax and electricity tax or for services provided by the
[operating companies],” unless alternative arrangements were
made between the Operating Companies and the consortium
member or its affiliated company. With regard to “operational
requirements,” the booklet stated, “Whether he is directly
engaged by the [Operating Companies] or on loan assignment
from a Member Company, the employee shall give his whole time
services to the [Operating Companies] . . . , in accordance with
the orders and directions from time to time given to him by the
[Operating Companies] . . . , and will work and reside in such
places as the [Operating Companies] may from time to time
require, and will abide by all applicable rules, regulations and
other practices of the [Operating Companies] . . . from time to
time in effect.”
The Irani plaintiffs submitted excerpts of Conlin’s
deposition testimony in Sarooie v. Asbestos Corporation Limited
(Super. Ct. L.A. County, 2015, No. BC529503). Conlin was asked,
14
based on the Iran booklet’s statement that loaned employees “will
remain employed” by the consortium member or affiliate
company while on loan to the Operating Companies, whether
Conlin was employed by Texaco when he worked for IORC at the
Abadan refinery. Conlin responded, “It appears so, according to
this definition.” When asked whether this “was the same
definition you were working under when you were in Iran,”
Conlin responded, “Yeah. The main two stipulations were that
we would have the right to come back to a job of equal status, and
that our benefit plans would remain in effect.”
The Irani plaintiffs did not dispute the facts set forth in the
Exxon defendants’ undisputed material facts that Irani was
“employed by” NIOC or IORC, and not by the Exxon defendants
or their predecessors.12 Nor did the Irani plaintiffs dispute
“IORC conducted the ‘basic’ refining functions” at the Abadan
refinery. The Irani plaintiffs also did not dispute that IOP did
not play a role in Iranian oil refinery operations.
E. The Trial Court’s Ruling and Entry of Judgment
On February 28, 2020 the trial court13 granted the Chevron
and Exxon defendants’ motions for summary judgment. In its
12 However, the Irani plaintiffs disputed the Exxon
defendants’ contention the Irani plaintiffs had not shown Irani
was supervised, directed, or instructed by an employee of the
Exxon defendants or their predecessors, and that the seconded
employees “remained employed by the [c]onsortium member.”
The Irani plaintiffs cited to the Agreement, the Iran booklet, and
the testimony of Agopsowicz, Conlin, and Larson.
13 Judge Maurice A. Leiter.
15
written ruling, the court14 found the Agreement did not create a
duty of care to Irani, and the Irani plaintiffs failed to raise a
triable issue of fact as to whether defendants owned or controlled
the Abadan oil refinery.15
On September 16 and 29, 2020 the trial court entered a
judgment of dismissal in favor of the Chevron defendants and the
Exxon defendants, respectively. The Irani plaintiffs timely
appealed.
DISCUSSION
A. Standard of Review on Summary Judgment
Summary judgment is appropriate only if there are no
triable issues of material fact and the moving party is entitled to
judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c);
Regents of University of California v. Superior Court (2018)
4 Cal.5th 607, 618 (Regents); Delgadillo v. Television Center, Inc.
(2018) 20 Cal.App.5th 1078, 1085.) “‘“‘“We review the trial court’s
decision de novo, considering all the evidence set forth in the
moving and opposing papers except that to which objections were
made and sustained.”’ [Citation.] We liberally construe the
evidence in support of the party opposing summary judgment and
resolve doubts concerning the evidence in favor of that party.”’”
14 Judge David S. Cunningham III entered the written order
granting defendants’ motions for summary judgment and the
judgment of dismissal in favor of defendants.
15 By stipulation of the parties’ counsel, the trial court did not
rule on the evidentiary objections made by the parties. The
parties do not renew their objections on appeal, and we do not
consider them.
16
(Hampton v. County of San Diego (2015) 62 Cal.4th 340, 347;
accord, Valdez v. Seidner-Miller, Inc. (2019) 33 Cal.App.5th 600,
607 (Valdez).)
A defendant moving for summary judgment has the initial
burden of presenting evidence that a cause of action lacks merit
because the plaintiff cannot establish an element of the cause of
action or there is a complete defense. (Code Civ. Proc., § 437c,
subd. (p)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th
826, 853; Valdez, supra, 33 Cal.App.5th at p. 607.) If the
defendant satisfies this initial burden, the burden shifts to the
plaintiff to present evidence demonstrating there is a triable
issue of material fact. (Code Civ. Proc., § 437c, subd. (p)(2);
Aguilar, at p. 850; Valdez, at p. 607.)
B. Principles of Contract Interpretation
“‘The rules governing the role of the court in interpreting a
written instrument are well established. The interpretation of a
contract is a judicial function. [Citation.] In engaging in this
function, the trial court “give[s] effect to the mutual intention of
the parties as it existed” at the time the contract was executed.
[Citation.] Ordinarily, the objective intent of the contracting
parties is a legal question determined solely by reference to the
contract’s terms. [Citations.]’” (Brown v. Goldstein (2019)
34 Cal.App.5th 418, 432; accord, State of California v.
Continental Ins. Co. (2012) 55 Cal.4th 186, 195; Sabetian, supra,
57 Cal.App.5th at p. 1069.) “‘Extrinsic evidence is admissible,
however, to interpret an agreement when a material term is
ambiguous. [Citations.]’” (Brown v. Goldstein, at p. 432; accord,
Sabetian, at p. 1069.)
17
“The law has long distinguished between a ‘covenant’ which
creates legal rights and obligations, and a ‘mere recital’ which a
party inserts for his or her own reasons into a contractual
instrument. Recitals are given limited effect even as between the
parties.” (Emeryville Redevelopment Agency v. Harcros Pigments,
Inc. (2002) 101 Cal.App.4th 1083, 1101; accord, Hunt v. United
Bank & Trust Co. (1930) 210 Cal.108, 115 [“Recitals or preambles
prefixed to an agreement may or may not have binding force. If
they form part of the operative covenants of the instrument in
such a way as to show it was designed and intended that they
should form part of it, they will be so construed.”]; O’Sullivan v.
Griffith (1908) 153 Cal. 502, 506 [“A covenant or warranty is
never implied from a mere recital.”]; Sabetian, supra,
57 Cal.App.5th at p. 1069.) However, “[i]f the operative words of
a grant are doubtful, recourse may be had to its recitals to assist
the construction.” (Civ. Code, § 1068;16 see Sabetian, at p. 1069;
Golden West Baseball Co. v. City of Anaheim (1994)
25 Cal.App.4th 11, 38 [language labeled “recital” was actually
covenant because it contained operative promise and recourse to
language was necessary to identify real property subject to the
agreement].)
16 All further undesignated statutory references are to the
Civil Code.
18
C. The Irani Plaintiffs Failed To Raise a Triable Issue of Fact
as to Their Negligence and Premises Liability Claims17
1. Duty of care
“The elements of a negligence claim and a premises liability
claim are the same: a legal duty of care, breach of that duty, and
proximate cause resulting in injury.” (Kesner v. Superior Court
(2016) 1 Cal.5th 1132, 1158 (Kesner); accord, Castellon v. U.S.
Bancorp (2013) 220 Cal.App.4th 994, 998.) “Recovery in a
negligence action depends as a threshold matter on whether the
defendant had ‘“a duty to use due care toward an interest of [the
plaintiff’s] that enjoys legal protection against unintentional
invasion.”’” (Southern California Gas Leak Cases (2019)
17 The Chevron and Exxon defendants argue we should not
reach the merits of the Irani plaintiffs’ arguments on appeal
because the law of the case doctrine applies to bar relitigation of
the issues in light of the Court of Appeal’s unpublished decision
in Malek v. Chevron U.S.A. Inc. (Nov. 14, 2019, B270957)
[nonpub. opn.] 2019 WL 6001030, noting the Malek case and this
case were coordinated as part of LAOSD Asbestos Cases. (Nov. 14,
2019, B270957) [nonpub. opn.] 2019 WL 6001030. “‘“The doctrine
of ‘law of the case’ deals with the effect of the first appellate
decision on the subsequent retrial or appeal: The decision of an
appellate court, stating a rule of law necessary to the decision of
the case, conclusively establishes that rule and makes it
determinative of the rights of the same parties in any subsequent
retrial or appeal in the same case.”’” (Leider v. Lewis (2017)
2 Cal.5th 1121, 1127.) The Irani plaintiffs were not parties to the
Malek appeal and, therefore, we do not apply the law of the case
doctrine.
19
7 Cal.5th 391, 397; accord, Sabetian, supra, 57 Cal.App.5th at
p. 1070.)
“Generally speaking, all persons have a duty to take
reasonable care in their activities to avoid causing injury, though
particular policy considerations may weigh in favor of limiting
that duty in certain circumstances.” (Brown v. USA Taekwondo
(2021) 11 Cal.5th 204, 209 (Brown); accord, Regents, supra,
4 Cal.5th at p. 619; Vasilenko v. Grace Family Church (2017)
3 Cal.5th 1077, 1083 (Vasilenko).) As section 1714, subsection (a)
provides, “Everyone is responsible, not only for the result of his or
her willful acts, but also for an injury occasioned to another by
his or her want of ordinary care or skill in the management of his
or her property or person, except so far as the latter has, willfully
or by want of ordinary care, brought the injury upon himself or
herself.” “‘[I]n the absence of [a] statutory provision declaring an
exception . . . , no such exception should be made unless clearly
supported by public policy.’” (Brown, at p. 217; accord, Regents,
at p. 628 [“The court may depart from the general rule of duty . . .
if other policy considerations clearly require an exception.”];
Kesner, supra, 1 Cal.5th at p. 1143.)
In determining whether an exception to section 1714
applies, courts consider “the foreseeability of harm to the
plaintiff, the degree of certainty that the plaintiff suffered injury,
the closeness of the connection between the defendant’s conduct
and the injury suffered, the moral blame attached to the
defendant’s conduct, the policy of preventing future harm, the
extent of the burden to the defendant and consequences to the
community of imposing a duty to exercise care with resulting
liability for breach, and the availability, cost, and prevalence of
insurance for the risk involved.” (Rowland v. Christian (1968)
20
69 Cal.2d 108, 113 (Rowland); accord, Brown, supra, 11 Cal.5th
at p. 217; Kesner, supra, 1 Cal.5th at p. 1143.)
A defendant’s control over property is sufficient to create a
duty of care owed to persons using the property. (Alcaraz v. Vece
(1997) 14 Cal.4th 1149, 1162, 1166 [affirming reversal of
summary judgment because there were triable issues of fact as to
landlord’s control of strip of city land where landlord had
“maintained the lawn . . . and, subsequent to the incident at
issue, constructed a fence surrounding the entire lawn”];
Sabetian, supra, 57 Cal.App.5th at p. 1071; Annocki v. Peterson
Enterprises, LLC (2014) 232 Cal.App.4th 32, 37 [trial court
should have allowed plaintiff to plead that defendant restaurant
failed to warn patrons leaving the restaurant that only a right
turn could safely be made from its parking lot although accident
occurred on adjacent roadway].)
“Premises liability ‘“is grounded in the possession of the
premises and the attendant right to control and manage the
premises”’; accordingly, ‘“mere possession with its attendant right
to control conditions on the premises is a sufficient basis for the
imposition of an affirmative duty to act.”’” (Kesner, supra,
1 Cal.5th at p. 1158; accord, Taylor v. Trimble (2017)
13 Cal.App.5th 934, 943-944 [“landowners are required ‘to
maintain land in their possession and control in a reasonably safe
condition’ [citations], and to use due care to eliminate dangerous
conditions on their property”].) However, “[a] defendant cannot
be held liable for the defective or dangerous condition of property
which it did not own, possess, or control. Where the absence of
ownership, possession, or control has been unequivocally
established, summary judgment is proper.” (Isaacs v. Huntington
Memorial Hospital (1985) 38 Cal.3d 112, 134; accord, Sabetian,
21
supra, 57 Cal.App.5th at p. 1071; Seaber v. Hotel Del Coronado
(1991) 1 Cal.App.4th 481 [hotel did not owe duty to patron who
was struck and killed in a marked crosswalk outside hotel’s
entrance]; cf. Vasilenko, supra, 3 Cal.5th at p. 1085 [church had
duty toward invitees who crossed public street to get to parking
lot across the street because the church increased the invitees’
exposure to the dangers of the street by placing and maintaining
the parking lot on the other side of the street].)
“[S]ection 1714 does not . . . impose a presumptive duty of
care to guard against any conceivable harm that a negligent act
might cause.” (Southern California Gas Leak Cases, supra,
7 Cal.5th at p. 399; accord, Sabetian, supra, 57 Cal.App.5th at
p. 1071; Dekens v. Underwriters Laboratories Inc. (2003)
107 Cal.App.4th 1177, 1187-1188 [plaintiffs failed to raise a
triable issue of material fact whether defendant “undertook the
responsibility to guarantee [decedent’s] safety from cancer-
causing asbestos through its process of testing and certifying
small appliances as safe from injury due to fire, electrical shock,
or injuries from sharp protruding objects”].)
2. The Irani plaintiffs failed to raise a triable issue of
fact as to the Chevron and Exxon defendants’
ownership, possession, or control of the Iranian
facilities
The Irani plaintiffs acknowledge the central question is
whether the Chevron and Exxon defendants (as successors to the
consortium members) had active supervisory and management
control over the Abadan refinery premises. The Irani plaintiffs
do not dispute NIOC, and later Iran, not the consortium
members, owned the facilities where Irani was exposed to
22
asbestos. However, they contend the consortium members
controlled the sources of asbestos at the Abadan refinery where
Irani was exposed. They also argue the Agreement created a
duty of care by providing for the consortium members to create
the Operating Companies, to ensure the Operating Companies
would use “good oil industry practice[s],” and to promise to
purchase oil for export and guarantee the production and
exportation of specified quantities of oil.
As we concluded in Sabetian, “[T]he Chevron and Exxon
defendants’ commitments in the Agreement do not demonstrate
their control over the Abadan refinery.” (Sabetian, supra,
57 Cal.App.5th at p. 1072.) We observed, “Article 1 of the
Agreement defined ‘Operating Companies’ by express reference
only to IOEPC (the exploration and production company) and
IORC (the refining company), to the exclusion of the separately
defined term of ‘[c]onsortium members.’ The Agreement gave
Iran and NIOC supervisorial authority over the Operating
Companies, with IORC and NIOC sharing control of the Abadan
refinery. As discussed, IORC controlled the refining and
processing of the crude oil and natural gas at the refinery (art. 4,
§ A, ¶ (2)) and NIOC controlled the ‘non-basic operations,’
including housing, medical and health services, and industrial
and technical training and education (art. 17, §§ A, ¶ (1), B).”
Contrary to [plaintiff]’s assertion the Chevron and Exxon
defendants’ predecessors had effective control over the Abadan
refinery, the Agreement expressly stated “‘no person other than
the Operating Companies, shall at any time . . . carry out . . . any
of the functions’” of exploration, production, and refining, and the
‘nature and extent of the foregoing rights, powers and obligations
of the Operating Companies as well as the nature and extent of
23
the supervision to be exercised by Iran and NIOC shall be strictly
limited to what is clearly stated in [article 4].’” (Sabetian, at
p. 1072.)
We concluded that the consortium members’ or their
subsidiaries’ ownership of 7 to 8 percent of the shares of IOP,
which in turn owned IOEPC and IORC, was “not sufficient to
create a duty of care as to refinery workers employed by the
Operating Companies, . . . absent evidence supporting the
piercing of the corporate veil based on the alter ego doctrine.”
(Sabetian, supra, 57 Cal.App.5th at p. 1072, citing Mesler v.
Bragg Management Co. (1985) 39 Cal.3d 290, 300 [to pierce the
corporate veil, a plaintiff must show “‘(1) that there be such unity
of interest and ownership that the separate personalities of the
corporation and the individual no longer exist and (2) that, if the
acts are treated as those of the corporation alone, an inequitable
result will follow’”] and Curci Investments, LLC v. Baldwin (2017)
14 Cal.App.5th 214, 220 [“Ordinarily a corporation is considered
a separate legal entity, distinct from its stockholders, officers and
directors, with separate and distinct liabilities and obligations.”].)
Further, as in Sabetian, to the extent the consortium
members controlled IOP, which owned the Operating Companies,
the Irani plaintiffs never presented evidence to support liability
of IOP as the parent corporation. (See Sabetian, supra,
57 Cal.App.5th at p. 1073, citing Waste Management, Inc. v.
Superior Court (2004) 119 Cal.App.4th 105, 110 [“[A] parent
corporation is not liable for injuries of a subsidiary’s employee in
the absence of evidence establishing a duty owed by the parent
corporation to the employee.”].) Here, the Irani plaintiffs
dismissed their alter ego claims before the summary judgment
proceedings.
24
In Sabetian we also rejected the plaintiffs’ argument that
the consortium members had the ability to intervene in refinery
management to meet their obligations under the Agreement
based on the consortium members’ incorporation of the Operating
Companies; their joint and several guarantee of the due
performance of the Operating Companies to Iran and NIOC,
including the commitment “‘to conform with good oil industry
practice’”; and their guarantee to Iran and NIOC of the
production and exportation of certain quantities of oil. (Sabetian,
supra, 57 Cal.App.5th at p. 1073.) Instead, the consortium
members would satisfy their commitments under the Agreement
by their creation of independent corporate entities (the Operating
Companies) to provide the necessary day-to-day management and
control of the Abadan refinery because “the Agreement tasked
IORC and NIOC, not the consortium members, with refinery
operations.” (Ibid.) Further, “IORC’s commitment to conform
with good industry practice was explicitly stated in the
Agreement as an obligation to Iran and NIOC, as were the
consortium members’ guarantees.” (Ibid.)18
We also reviewed the deposition testimony submitted by
the plaintiffs in Sabetian (also relied on by the Irani plaintiffs)
18 We also rejected the argument “defendants’ control over the
Abadan refinery is demonstrated by the recital language in the
Agreement,” concluding “the recital language referring to the
willingness of the consortium members to provide their
management abilities and their agreement to undertake the
operation and management of the oil facilities was by its own
terms limited by the specific provisions of the Agreement that
vested responsibility for operation and control in the Operating
Companies and NIOC.” (Sabetian, supra, 57 Cal.App.5th at
pp. 1073-1074.)
25
and concluded, “The testimony of Larson, testifying as Exxon
Mobil Corporation’s person most qualified, that ‘there may have
been some’ Exxon or Mobil employees in high level management
positions at the Abadan refinery is consistent with defendants’
evidence that employees of consortium members who worked at
the Abadan refinery were loaned to the refinery and under the
control of and paid by IORC. For example, Soler, the senior
subsidiary governance liaison for Chevron Corporation, declared
that consortium members sometimes provided ‘skilled personnel’
to the Abadan refinery in response to requests from the
Operating Companies, but these workers were then ‘formally
employed’ by the Operating Companies, not their former
consortium member employer. Similarly, Conlin, who in 1958
was an assistant chief design engineer employed by Texaco Inc.,
testified that from 1958 to 1963 he was seconded to work at the
Abadan refinery, at which time he was employed and paid by
IORC and took direction from IORC, not Texaco Inc., or other
American oil companies. Further, Larson testified he was not
aware of Exxon or Mobil ‘exercis[ing] any direct control over
anybody’ working at the Abadan refinery.” (Sabetian, supra,
57 Cal.App.5th at p. 25.)
Contrary to the Irani plaintiffs’ contention in their reply
brief, the additional evidence relied on by the Irani plaintiffs did
not create a triable issue of fact that the consortium members
had control over operations at the Abadan refinery. The Irani
plaintiffs contend the Iran booklet establishes that employees
loaned by the consortium members or their affiliates remained
employees of the foreign company while working for the
Operating Companies in Iran, distinguishing this case from
Sabetian. The Irani plaintiffs also rely on Conlin’s deposition
26
testimony in which he acknowledged that while he worked for
IORC in Iran, he remained an employee of Texaco, as defined by
the Iran booklet, explaining the “main two stipulations were that
we would have the right to come back to a job of equal status, and
that our benefit plans would remain in effect.” However, the
booklet also dictated the loaned employee would work “in
accordance with the orders and directions from time to time given
to him by the [Operating Companies] . . . and will abide by all
applicable rules, regulations and other practices of the
[Operating Companies] . . . from time to time in effect.” This
provision is consistent with Conlin’s testimony that workers in
the Iranian refinery did not take direction from “their past oil
company employers or any oil company subsidiaries.” Further,
neither the booklet nor Conlin’s testimony shows that employees
of the consortium members who were seconded to the Abadan
refinery as management employees were paid by the consortium
members or their work was directed or controlled by the
consortium members.19 Nor does Agopsowicz’s testimony Exxon’s
19 The Irani plaintiffs also rely on Agopsowicz’s testimony in
which he agreed that the Exxon defendants’ predecessors
“believe[d] at the time of signing [the Agreement] that [they] had
an obligation to ensure that the Abadan [r]efinery was operated
appropriately.” But as we concluded in Sabetian, “[T]he
consortium members’ guarantees were to Iran and NIOC and fall
short of evidence defendants exercised direct control of day-to-day
operations at the refinery. Further, although Agopsowicz was
designated as the person most qualified for the Exxon
defendants, his testimony was not based on personal knowledge
of the consortium members’ intent in entering into the
Agreement, but his reading of the Agreement.” (Sabetian, supra,
57 Cal.App.5th at p. 1075, fn. 16.) The Irani plaintiffs take issue
27
predecessor sent its employee Paul Kuhl to work for the
Operating Companies as general manager of the Abadan refinery
create a triable issue of fact as to the predecessor company’s
control absent evidence Kuhl was directed or controlled by the
predecessor company in his role as refinery manager.
The Irani plaintiffs’ reliance on the holding in Kesner,
supra, 1 Cal.5th 1132 is misplaced. In Kesner, the Supreme
Court held that employers and premises owners have a duty to
protect family members of on-site workers from secondary
exposure to asbestos carried home on the bodies and clothing of
the workers. (Id. at p. 1140.) The Kesner court started from the
premise that under section 1714, “‘the general duty to take
with the latter statement, contending that as the person most
qualified Agopsowicz spoke for the Exxon defendants irrespective
of his personal knowledge. However, the Irani plaintiffs do not
provide any argument to rebut our conclusion in Sabetian that
the guarantees by the predecessor companies to Iran and NIOC
did not show their direct control of day-to-day operations at the
Abadan refinery. We similarly reject the Irani plaintiffs’ reliance
on the statement of Chevron’s predecessor to stockholders in its
1964 annual report that “[t]he Iranian oil consortium has
operated Iran’s principal oil[] producing, refining, and
transportation facilities for the past ten years,” and their reliance
on the Exxon defendants’ admission in their separate statement
of facts that the consortium members “were to ensure the
availability of ‘sufficient oil and products’ ‘to market substantial
quantities of Iranian oil . . . .’” In context, both statements refer
to the consortium members’ creation of the Operating Companies
to operate and manage the Abadan refinery, their provision of
seconded employees to the Operating Companies, and their
ownership interest in IOP. This evidence fails to show
defendants exercised direct control of the day-to-day operations
at the refinery.
28
ordinary care in the conduct of one’s activities’ applies to the use
of asbestos on an owner’s premises or in an employer’s
manufacturing processes” (Kesner, at p. 1144), but it considered
the Rowland factors to determine “‘whether a categorical
exception to that general rule should be made’ exempting
property owners and employers from potential liability to
individuals who were exposed to asbestos by way of employees
carrying it on their clothes or person.” (Id. at p. 1145, quoting
Cabral v. Ralphs Grocery Co. (2011) 51 Cal.4th 764, 774.) The
Kesner court concluded it was “entirely foreseeable” that workers
would bring asbestos dust home at the end of the day if adequate
precautions were not taken, and, therefore, “[t]he foreseeability
factors weigh in favor of finding a duty.” (Kesner, at p. 1149.)
Unlike the allegations in Kesner, there is no evidence the
Chevron and Exxon defendants operated or controlled the
Abadan refinery or the sources of asbestos at the refinery,
thereby imposing on them a duty under section 1714 to protect
refinery workers like Irani from exposure to asbestos. (See Isaacs
v. Huntington Memorial Hospital, supra, 38 Cal.3d at p. 134.)
Irani was employed by NIOC and IORC on premises operated by
NIOC and IORC. This is in contrast to the allegations at issue in
Kesner that the defendant’s predecessors were “engaged in active
supervisory control and management of asbestos sources” at the
workplace. (Kesner, supra, 1 Cal.5th at p. 1161.)
3. The Irani plaintiffs failed to raise a triable issue of
fact that the Agreement created a special relationship
between defendants’ predecessors and Irani
The Irani plaintiffs contend the Chevron and Exxon
defendants (through their predecessor companies) owed a duty to
29
protect refinery workers like Irani from asbestos exposure based
on a special relationship between the consortium members and
the refinery workers arising from the consortium members’
guarantee in the Agreement of the Operating Companies’ “due
performance” under the Agreement, relying on J’Aire Corp. v.
Gregory (1979) 24 Cal.3d 799 (J’Aire). Under the Irani plaintiffs’
argument, the Chevron and Exxon defendants owed a duty to the
refinery workers because harm to refinery workers from asbestos
exposure was reasonably foreseeable under the Agreement.
Further, the Irani plaintiffs point to the Operating Companies’
obligation “to conform with good oil industry practice and sound
engineering principles.” We rejected this argument in Sabetian,
holding the J’Aire factors did not support imposition of liability
on the Chevron and Exxon defendants.20 (Sabetian, supra,
57 Cal.App.5th at p. 1075.)
20 In their reply brief, the Irani plaintiffs criticize our analysis
in Sabetian, arguing section 1714 establishes a presumptive duty
to exercise ordinary care in one’s activities and “Sabetian did not
start from the presumption of a duty [of care] and determine
whether, given that presumption, a categorical exception should
be created.” However, as we concluded in Sabetian, no duty of
care arose under section 1714 because the plaintiffs failed to
show the Chevron or Exxon defendants operated or controlled the
premises where the asbestos exposure was alleged to have
occurred. (Sabetian, supra, 57 Cal.App.5th at p. 1075 [“[T]here is
no evidence the Chevron and Exxon defendants operated or
controlled the Abadan refinery or the sources of asbestos at the
refinery, thereby imposing on them a duty under section 1714 to
protect refinery workers like Sabetian from exposure to
asbestos.”].) We therefore had no occasion to evaluate whether
an exception to section 1714 applied.
30
“A duty running from a defendant to a plaintiff may arise
from contract, even though the plaintiff and the defendant are
not in privity. [Citations.] Under these circumstances, the
existence of a duty is not the general rule, but may be found
based on public policy considerations.” (Lichtman v. Siemens
Industry Inc. (2017) 16 Cal.App.5th 914, 921 (Lichtman)
[company responsible for maintaining battery backup system for
traffic signals owed duty of care to plaintiffs who were injured in
traffic collision during power outage in which traffic signal
stopped functioning]; J’Aire, supra, 24 Cal.3d at pp. 802, 804-805
[lessee who operated a restaurant alleged sufficient facts to state
a cause of action for negligence to recover lost income from
dilatory performance by contractor hired by owner of building to
renovate restaurant]; Biakanja v. Irving (1958) 49 Cal.2d 647,
651 (Biakanja) [notary public who drafted a will for the decedent
owed a duty of care to an estate beneficiary who was not in
contractual privity with the notary public]; see generally Aas v.
Superior Court (2000) 24 Cal.4th 627, 637-645 (Aas) [detailing
evolving case law], superseded by statute on other grounds as
stated in Rosen v. State Farm General Ins. Co. (2003) 30 Cal.4th
1070, 1079-1080.)
Under the balancing test articulated in Biakanja and
J’Aire, in determining whether a duty of care arises from a
contract in favor of a noncontracting party, the Supreme Court
considered “[(1)] ‘the extent to which the transaction was
intended to affect the plaintiff,’ [(2)] ‘the foreseeability of harm to
[him],’ [(3)] ‘the degree of certainty that the plaintiff suffered
injury,’ [(4)] ‘the closeness of the connection between the
defendant’s conduct and the injury suffered,’ [(5)] ‘the moral
blame attached to the defendant’s conduct,’ and [(6)] ‘the policy of
31
preventing future harm.’” (Southern California Gas Leak Cases,
supra, 7 Cal.5th at p. 401, citing J’Aire, supra, 24 Cal.3d at
p. 804; accord, Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817,
838 (Goonewardene);21 Aas, supra, 24 Cal.4th at p. 644; Stewart
v. Cox, (1961), 55 Cal.2d 857, 863 (Stewart); see Biakanja, supra,
49 Cal.2d at p. 650.)
As we concluded in Sabetian, “the J’Aire factors do not
support imposition of liability on the Chevron and Exxon
defendants by virtue of the consortium members’ guarantee in
article 3 of the Operating Companies’ performance of their
obligations under the Agreement. Most significantly, under the
first factor, the Agreement was not intended to affect . . . refinery
workers, but rather, it was intended to accelerate Iranian oil
production and exportation to the global market. Indeed, the
obligations of the Operating Companies most relevant to
protection of the refinery workers—to conform with good industry
practice and prepare plans and programs for industrial and
technical training and education—were specifically owed under
the Agreement ‘to Iran and NIOC.’ [Irani] is unlike the plaintiff
21 In Goonewardene, supra, 6 Cal.5th at page 838, the
Supreme Court observed additional “policy considerations that
may appropriately be considered in determining whether a tort
duty of care should be recognized or imposed in the absence of
privity of contract” included whether recognition of the duty of
care “would (1) impose liability out of proportion to fault, (2) be
unnecessary in light of the prospect of private ordering [of a
product or service], and (3) would likely have an adverse effect on
the availability of [a defendant’s] services.” Because the Irani
plaintiffs have not argued that consideration of these additional
factors supports finding a duty of care, we focus on the factors in
the Biakanja and J’Aire balancing tests as briefed by the parties.
32
in J’Aire, a lessee whose restaurant business was interrupted by
a contractor’s renovations to improve the restaurant, or the
plaintiff in Biakanja, the sole beneficiary of a will the notary
public negligently failed properly to attest.” (Sabetian, supra,
57 Cal.App.5th at p. 1078, citing J’Aire, supra, 24 Cal.3d at p. 804
and Biakanja, supra, 49 Cal.2d at pp. 648, 651.)
We reasoned in Sabetian, “Typically, as in J’Aire and
Stewart, the first two J’Aire factors operate in tandem—because
the underlying contract was intended to affect the plaintiffs, the
harm to the plaintiffs as a result of the defendants’ negligence
was a fortiori foreseeable.” (Sabetian, supra, 57 Cal.App.5th at
p. 1078.) But we noted that “where a plaintiff is not entitled to
maintain a breach of contract action based on the third party
beneficiary doctrine, ‘it would clearly be anomalous to impose tort
liability, with its increased potential damages [citation], upon
[the defendant] based upon its alleged failure to perform its
obligations under its contract with plaintiff’s employer.’” (Id. at
p. 1079, quoting Goonewardene, supra, 6 Cal.5th at p. 840.)
Here, as in Sabetian, Irani “was not a third party beneficiary of
the Agreement because one of the three required elements is
missing—that the ‘motivating purpose of the contracting parties
was to provide a benefit to the third party.’” (Sabetian, at
p. 1079, quoting Goonewardene, at p. 830.)
We concluded the foreseeability of harm to refinery workers
as a result of the consortium members’ failure to protect refinery
workers did not favor liability, because the Agreement vested
exclusive power to control day-to-day refinery operations in IORC
and IOEPC. (Sabetian, supra, 57 Cal.App.5th at p. 1079.) “The
fact the consortium members committed to ensure the Operating
Companies performed their obligations under the Agreement
33
does not mean the consortium members had the power to control
the day-to-day activities of the refineries. This is unlike the
situation in J’Aire, in which the contractor had the ability to
control the extent to which the tenant was harmed by the
contractor’s conduct under the agreement with the property
owner. (J’Aire, supra, 24 Cal.3d at p. 804.).” (Sabetian, at
p. 1079.)
As to the third factor, as in Sabetian, there is a high degree
of certainty that Irani suffered injury due to his exposure to
asbestos at the Abadan refinery.22 (Sabetian, supra,
57 Cal.App.5th at p. 1080.) “But the fourth factor, the closeness
of the connection between consortium members’ conduct and
[Irani]’s injury, is attenuated because IORC and NIOC, not the
consortium members, controlled day-to-day refinery operations.
Likewise, the fifth factor, the moral blame attached to the
consortium members’ conduct, is weak,” absent evidence of the
consortium members’ negligence in the execution of their
contractual duties or that they had control over the operations
that caused the harm. (Ibid.)
“The sixth factor, the policy of preventing future harm,
similarly does not favor [the Irani plaintiffs]. Because the
consortium members were not in a position to control the day-to-
day operations of the Abadan refinery, they were not in the best
position to prevent future harm at the refinery. Further, the
Agreement acknowledged the consortium members were separate
corporate entities from the Operating Companies, including
22 On appeal, defendants do not contend the Irani plaintiffs
failed to raise a triable issue of fact regarding whether Irani’s
mesothelioma was caused by asbestos exposure at the Abadan
refinery.
34
IORC. We recognize the important public policy to require
employers to provide a safe and secure workplace, but there is
also a public policy recognizing the benefits of allowing
companies to limit their business risks through the creation of a
separate corporate entity.” (Sabetian, supra, 57 Cal.App.5th at
p. 1080.) Here, the consortium members limited their risk by
creating the Operating Companies. Further, as noted, the Irani
plaintiffs abandoned their argument in the trial court the
consortium members were the alter egos of IOP or the Operating
Companies.
The Irani plaintiffs’ reliance on Seo v. All-Makes Overhead
Doors (2002) 97 Cal.App.4th 1193, 1197 is misplaced. There, a
commercial subtenant was injured when he reached his arm
through an electronic sliding gate to activate a switch to close the
gate. (Id. at p. 1198.) The Court of Appeal concluded the
defendant company that had repaired the gate for the property
owner owed no duty of care to the subtenant to warn of design
defects unrelated to the repairs performed by the defendant. (Id.
at pp. 1198-1199.) The Seo court observed, however, that an
independent contractor may owe a duty to a third party where it
negligently performs a repair, fails to make a requested repair, or
assumes the owner’s duty to inspect and maintain the equipment
and negligently fails to perform, leading to injury to the third
party. (Id. at p. 1206.) Here, the Irani plaintiffs have not
presented evidence showing defendants performed repairs,
inspections, or maintenance or assumed the responsibility
35
assigned to IORC and NIOC under the Agreement to inspect or
maintain the Abadan refinery.23
Finally, the Irani plaintiffs argue the predecessor
companies were sureties of the performance by the Operating
Companies by virtue of the predecessor’s commitments in the
Agreement, relying on sections 2787 and 2807.24 They argue the
23 Mace v. United States (N.D. Cal., Mar. 23, 2017, No. 15-CV-
04060-LB) 2017 WL 1102736, relied on by the Irani plaintiffs, is
distinguishable for the same reason. In Mace, the National Park
Service hired the defendant tree services company on two
occasions to remove visible large seed pods from the park’s trees.
(Id. at pp. *1-2.) Nineteen months after the tree services
company completed its second seed pod removal, a park patron
was injured by a falling pod. (Ibid.) The tree services company
moved for summary judgment, arguing it owed no duty beyond
its contractual commitments to remove the seed pods. (Id. at
p. *6.) The district court denied the motion, finding triable issues
whether the tree service company had breached a duty of care to
warn the National Park Service about the dangers of selectively
pruning seed pods and to recommend safe pruning measures.
(Id. at p. *10.) Unlike the tree services company in Mace, there is
no evidence the predecessor companies performed any work for
NIOC or the Operating Companies that gave rise to Irani’s
asbestos-related injury. Under the Agreement, it was IORC and
NIOC that assumed the duty to control refinery operations. The
Irani plaintiffs have provided no authority for the proposition a
party that guarantees the performance of another assumes a
duty to prevent harm to third parties caused by the performance.
24 Section 2787 provides in part, “A surety or guarantor is one
who promises to answer for the debt, default, or miscarriage of
another, or hypothecates property as security therefor.”
Section 2807 states, “A surety who has assumed liability for
36
predecessor companies, as sureties, became liable to the Irani
plaintiffs for the harm caused to Irani by the Operating
Companies, which defaulted on their guarantee “to conform with
good oil industry practice.” This argument lacks merit. As
discussed, “IORC’s commitment to conform with good industry
practice was explicitly stated in the Agreement as an obligation
to Iran and NIOC, as were the consortium members’ guarantees.”
(Sabetian, supra, 57 Cal.App.5th at p. 1073.) Brunswick Corp. v.
Hays (1971) 16 Cal.App.3d 134, relied on by the Irani plaintiffs, is
inapposite. Brunswick addressed a guarantor’s liability to a
creditor for the debts of the principal debtor. The Irani plaintiffs
cite no authority for the proposition a guarantor is liable in tort
for injuries to third parties caused by the conduct of the principal
debtor. To the extent the predecessor companies were legally
obligated under the Agreement for the default of the Operating
Companies, the obligation was to Iran and NIOC, who stood in
the position of creditors under the surety framework argued by
the Irani plaintiffs.25
payment or performance is liable to the creditor immediately
upon the default of the principal, and without demand or notice.”
25 The Irani plaintiffs also invoke section 3521, which
provides, “He who takes the benefit must bear the burden.”
Section 3521 provides a “maxim[] of jurisprudence” to “aid in
the[] just application” of the Civil Code, “not to qualify” its
provisions. (§ 3509.) Among other things, this maxim underlies
the doctrine of equitable estoppel (In re Marriage of
Bittenson (2019) 41 Cal.App.5th 333, 338) and informs the
interpretation of contracts. (See Hearn Pacific Corp. v. Second
Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 119 [under
§ 3521 “an assignee’s acceptance of the benefits of a contract
37
4. The Irani plaintiffs failed to raise a triable issue of
fact that defendants’ predecessors had a duty to
protect Irani based on a special relationship between
defendants’ predecessors and the Operating
Companies
The Irani plaintiffs contend the predecessors to the
Chevron and Exxon defendants owed a duty to Irani based on a
special relationship the defendants had with the Operating
Companies to protect Irani from the intentional misconduct of
third parties. This contention lacks merit.
“A duty to control, warn, or protect may be based on the
defendant’s relationship with ‘either the person whose conduct
needs to be controlled or [with] . . . the foreseeable victim of that
conduct.’” (Regents, supra, 4 Cal.5th at p. 619 [“a duty to control
may arise if the defendant has a special relationship with the
foreseeably dangerous person that entails an ability to control
that person’s conduct”]; accord, Brown, supra, 11 Cal.5th at
p. 215 [“In a case involving harm caused by a third party, a
person may have an affirmative duty to protect the victim of
another’s harm if that person is in what the law calls a ‘special
relationship’ with either the victim or the person who created the
harm.”]; Delgado v. Trax Bar & Grill (2005) 36 Cal.4th 224, 235
[same].) “A special relationship between the defendant and the
victim is one that ‘gives the victim a right to expect’ protection
containing a fee clause, by bringing suit, constitutes an implied
assumption of the attorney fee obligations, unless there is
evidence the parties did not intend to transfer those fee
obligations”].) The Irani plaintiffs cite no authority interpreting
section 3521 to impose tort liability based on a contract for
injuries to third parties.
38
from the defendant, while a special relationship between the
defendant and the dangerous third party is one that ‘entails an
ability to control [the third party's] conduct.’ . . . The existence of
such a special relationship puts the defendant in a unique
position to protect the plaintiff from injury. The law requires the
defendant to use this position accordingly. [Citation.] [¶] Where
the defendant has neither performed an act that increases the
risk of injury to the plaintiff nor sits in a relation to the parties
that creates an affirmative duty to protect the plaintiff from
harm . . . the defendant owes no legal duty to the plaintiff.”
(Brown, at p. 216; accord, Regents, at p. 621.)
In Regents, the Supreme Court considered the “common
features” of a special relationship. (Regents, supra, 4 Cal.5th at
p. 620.) The Supreme Court observed, “Generally, the
relationship has an aspect of dependency in which one party
relies to some degree on the other for protection. . . . [¶] . . . The
corollary of dependence in a special relationship is control.
Whereas one party is dependent, the other has superior control
over the means of protection. ‘[A] typical setting for the
recognition of a special relationship is where “the plaintiff is
particularly vulnerable and dependent upon the defendant who,
correspondingly, has some control over the plaintiff’s welfare.”’”
(Regents, supra, 4 Cal.5th at pp. 620-621.) Further, “[s]pecial
relationships also have defined boundaries. They create a duty of
care owed to a limited community, not the public at large.” (Id.
at p. 621.) Finally, the court noted that “although relationships
often have advantages for both participants, many special
relationships especially benefit the party charged with a duty of
care,” identifying retail stores and hotels as examples. (Ibid.)
39
The Regents court concluded a college has a special
relationship with its students, observing that college students are
“dependent on their college communities to provide structure,
guidance, and a safe learning environment” and “have superior
control over the environment and the ability to protect students.”
(Regents, supra, 4 Cal.5th at p. 625.) However, the court limited
the college’s duty of care to “activities that are tied to the school’s
curriculum but not to student behavior over which the university
has no significant degree of control,” explaining the college would
be expected to retain a “measure of control” over the classroom
environment. (Id. at p. 627.)
Here, as discussed, the Irani plaintiffs failed to raise a
triable issue that the Chevron and Exxon defendants retained
any measure of direct control over the Operating Companies. As
we observed in Sabetian in the context of our analysis of the
J’Aire factors, the consortium members were not in the best
position to prevent future harm at the refinery. (Sabetian, supra,
57 Cal.App.5th at p. 1080.) In the absence of a showing of
defendants’ authority to exercise control, the trial court properly
granted summary judgment in favor of the Irani plaintiffs. (See
Barenborg v. Sigma Alpha Epsilon Fraternity (2019)
33 Cal.App.5th 70, 75, 81 [national fraternity did not have special
relationship with its local chapter and therefore had no duty to
protect student who was injured at party held by local chapter,
despite national fraternity’s adoption of policies governing local
chapter and ability to discipline chapter for policy violations
because it had no ability to prevent injury].)
The Irani plaintiffs’ reliance on our opinion in Brown v.
USA Taekwondo (2019) 40 Cal.App.5th 1077, affd. Brown, supra,
11 Cal.5th 204, is misplaced. There, we concluded the plaintiffs
40
had alleged facts sufficient to support a special relationship
between the defendant taekwondo association and its registered
taekwondo coach, and on that basis we concluded the taekwondo
association had a duty to protect student athletes from sexual
abuse by the coach. (Brown v. USA Taekwondo, supra, 40
Cal.App.5th at p. 1094.)26 We reasoned that because the
taekwondo association had control over the coach through its
policies and procedures establishing requirements for coaches, it
“was therefore ‘“‘in the best position to protect against the risk of
harm’”’ and ‘“meaningfully reduce the risk of the harm that
actually occurred.”’” (Ibid.) Further, we found the Rowland
factors supported “recognition of [the taekwondo association’s]
duty to use reasonable care to protect taekwondo youth athletes
from foreseeable sexual abuse by their coaches.” (Brown v. USA
Taekwondo, at p. 1101.) However, we concluded the plaintiffs
had not alleged facts sufficient to establish that the defendant
Olympic Committee had a special relationship with the coach
because the allegations did not establish the committee had the
ability to control the coach’s conduct or was in the best position to
protect plaintiffs from the coach’s sexual abuse. (Id. at p. 1102.)
Here, the record does not contain any policies and
procedures or other evidence showing the predecessors to the
Chevron and Exxon defendants had the ability to control the day-
26 The Supreme Court in affirming our decision “express[ed]
no view on the merits of the Court of Appeal’s application of the
special relationship test to either USAT or USOC. These fact-
dependent issues fall outside the scope of the only question
presented for our review.” (Brown, supra, 11 Cal.5th at p. 213,
fn. 4.)
41
to-day conduct of the Operating Companies in running the
Abadan refinery, nor have the Irani plaintiffs presented evidence
showing defendants’ predecessors had the ability to control the
asbestos products used at the Abadan refinery or were in the best
position to protect Irani from asbestos exposure. As discussed, it
was NIOC that owned the refinery and IORC that operated the
refinery, without any direct control by the predecessor
companies.
DISPOSITION
The judgment is affirmed. Respondents are entitled to
recover their costs on appeal.
FEUER, J.
We concur:
PERLUSS, P. J.
McCORMICK, J.*
* Judge of the Orange County Superior Court, assigned by
the Chief Justice pursuant to article VI, section 6 of the
California Constitution.
42